EWEC - Confident Europe sets sights even higher

EUROPE: Europe is already on track to meet 100% of its electricity from renewables by 2050 - with 50% to come from wind. This was the cheering news that greeted delegates who defied a volcanic ash cloud and the aviation ban over northern Europe to make the often difficult journey to Poland for this year's European Wind Energy Conference (EWEC), held April 20-23 in Warsaw.

The European Commission is working on an energy-policy roadmap for 2050 that energy commissioner Gunther Oettinger said is needed to maintain an effective European strategy regarding the challenges posed by energy and climate change. He added: "We need to keep moving away from the current dependency on CO2-emitting fuels towards a more sustainable energy mix with greater use of renewables and, surely, wind energy is one of the main contributions to our future energy supply."

The wind industry maintains that wind could provide 50% of electricity supply. An average 23% growth rate over the past decade shows this is achievable, given an adequate grid network and the right market structures, said Christian Kjaer, CEO of the European Wind Energy Association (EWEA). "The potential is there and the industry is ready," he added. "All we have to do is maintain current growth rates onshore and offshore."

Kjaer said that last year renewables accounted for 62% of all new installed capacity in Europe - up from 21% in 2000. At that rate, the EU is well on the trajectory for 100% renewables by 2050 in the power sector, he added. Wind provided the lion's share of added renewables capacity in 2009 and comprised 39% of all electricity generation capacity installed during the year - more than any other form of power generation. While the wind industry installed 10.2GW in 2009, 3.2GW of coal generation capacity and 1.4GW of nuclear capacity were decommissioned.

First things first

The first priority for achieving the vision is a pan-European grid structured with the needs of renewables in mind, said Kjaer. A single market for electricity across Europe is a key requirement, he said. "It is astounding that 24 years after establishing free movement of goods, services, capital and labour, the EU has not yet established a fifth freedom: free movement of electricity," Kjaer added.

EWEA is urging politicians to show commitment to changes to the long-term energy mix. EWEA president Arthouros Zervos said: "The decisions we take today will have a big impact on our energy supplies in 40 years' time."

Only through a fully renewable power sector can the G8 and EU achieve their commitments to an 80% cut in CO2 emissions by 2050, said Zervos. "We can't allow the politicians to make grand statements and leave the serious decisions to the next generation. Given the long life of power plants, our vision for 2050 has to be reflected in the construction of new plants from at least 2020 onwards."

Zervos noted that Europe is already on track to meet its existing 20% renewables goal by 2020. "There is a strong belief that we will go beyond the 2020 target," he said, adding that wind is the cheapest option available today.

Europe should be talking about a renewable-energy economy, not a low-carbon one, Zervos stressed. "Renewable energies can provide 100% of Europe's power supplies by 2050 without any further contribution from any so-called low-carbon technologies," he said, dismissing the need for carbon capture and storage and nuclear power. He called on the EU to phase out subsidies for fossil fuels and nuclear energy and introduce EU-wide taxes on energy and carbon emissions. "Auctioning of CO2 certificates will be the big game changer," he predicted.

A zero-carbon power sector would also yield economic benefits for Europe, Zervos said. Investment of about EUR2.8 trillion in renewables would prevent carbon costs of EUR3.7 trillion, according to the EWEA president. It would also provide 2.7 million more jobs in 2020 and another 6 million by 2050. But Zervos warned that Europe can only achieve 100% renewables if big gains are made in energy efficiency.

Future trends

The consensus of the panel was that wind will achieve the 2050 vision. An important driver will be the financial markets, said EWEA vice-president Klaus Rave. "Large funds look for long-term safe havens for investments and a guaranteed return for 20 years or more," he told delegates. "The renewable power sector is an ideal investment opportunity in that respect."

Wind turbine technology will also evolve and become more diverse, said Rave. He drew a parallel with the automobile industry. "Today's car technology is far more sophisticated than we would have dreamed of 40 years ago; it's manufactured in an entirely different way."

Andrew Garrad, CEO of wind industry consultants GL Garrad Hassan, echoed that view, saying there will be a huge range of wind turbine sizes installed in a variety of markets to meet diverse needs. "I think you will see a return to smaller turbines in the next decade or so," he said.

Northern Europe, with its high population density and growing scarcity of onshore sites, is creating an offshore market, he noted. This currently represents 10% of the European market but 20% of the investment in the region's wind power. Within six years, the industry will see radically different turbines for offshore use, involving major engineering changes. No longer will wind turbines need to be "socially engineered" to be aesthetically acceptable and emit low noise, but will instead be designed for maximum productivity. "We are working on one 10GW project in China and it is gobsmacking," he said.

Garrad called for the 2050 discussion to be widened beyond a European context, telling listeners not to forget North Africa. That is a huge untapped potential with vast sites yielding wind speeds of 9 to 9.5 metres per second, he said. He also pointed to a study his firm conducted for the International Energy Agency that showed the best place for CO2 mitigation is in the former Soviet countries - particularly Russia, which has lots of space and lots of wind, and where huge wind farms could displace existing power stations fuelled by "filthy brown coal". Russia has a mere 11MW of installed wind power capacity today.

Meantime, it is up to Europe to encourage a global market in renewables. "The bigger issues are elsewhere," said Garrad. "Maybe we're not doing as much as we should be here in Europe, but we are already doing a lot more than many other places. So it should be a broader discussion." By 2050, the debate will have moved on from a single European power market to a regulated world market for electricity, said Rave. Pointing to the large untapped wind resource to the east and in Africa, he said: "There is vast potential to use the energy market as a driver for economic integration, wealth and understanding between nations."

Suppliers market

Turning to the question of who will make the turbines needed in 2050, Garrad predicted the firms building wind turbines will be the same as those building conventional power stations. "Going back 40 years, GE and Siemens were building thermal power plants. In 40 years time, they will be building more power stations, whether wind or thermal," he said. "The wind business has become part of the conventional business; we should dissolve that distinction."

The big power conglomerates will dominate, agreed Steve Sawyer, secretary general of the Global Wind Energy Council. There will still be room for wind-only players, he said, but probably not at the top end of the market: "It's hard to see how they can compete with the GEs, the Alstoms and the Siemens." The Chinese and Koreans will not take over, but they will become significant players on the manufacturing side, he said. "A lot of people underestimate the significance of Samsung, Hyundai and Daewoo diving into this business in 2009," he said, adding that, as three of the world's biggest companies, the South Korean firms will have a big impact. "The most dynamic OECD economy in that part of the world has decided that wind is going to be a big part of their energy future," Sawyer said. "That is hugely significant."

Kjaer said the impact of competition from manufacturers from the Far East or the US should not be overstated. "Seventy per cent of a wind turbine comes in the form of components from sub-suppliers," he said. No matter whose name appears on the turbine, the largest part of the value added comes further down the supply chain, with many of the benefits from jobs and manufacturing either in or close to the market in which the turbines are built, he added.

"That might change in 40 years time," warned Garrad. He pointed to the trend for Far East companies to manufacture more components themselves. Mitsubishi, for example, makes gearboxes, generators and blades. "If it wants to, it can make the whole thing," he said. "And as the emphasis gets bigger and bigger, (Far Eastern companies) are likely to become more vertically integrated."

The competitive edge will go to manufacturers who can prove that each of their wind turbines is identical to all others in the range, commented Rave. "One of the biggest flaws in this industry over the last 20 years was that you really did not know what was in each individual turbine."

By comparison, Sawyer said the US has over the past few years managed to raise domestic content in turbines to 50%, although US market leader GE has just outsourced most of its nacelle manufacturing to Brazil. Recent agonising in the US media about losing the clean-energy race to China misses the point. "In fact, they already lost it to the Europeans a long time ago," Sawyer said. "The question is whether the Europeans are going to lose it to the Chinese."

MORE WIND, LOWER PRICES

Support schemes benefit end users, reports Heather O'Brian.

Increasing wind energy's proportion of the power mix not only reduces carbon-dioxide emissions, but also brings down the price of electricity, a review prepared for the European Wind Energy Association (EWEA) by independent energy consultants Poyry has shown.

Poyry's assessment of case studies in Germany, Denmark and Belgium showed wholesale spot prices were reduced by between EUR3/MWh and EUR23/MWh, depending on assumptions made on the level of wind power in the system and the overall energy mix, along with other factors.

The positive price effect arises because wind replaces carbon-dioxide-intensive power generation technologies in the power mix with higher marginal costs, bringing down the price of all electricity traded. With a fuel cost of zero, the marginal cost - the added cost of generating additional units of electricity - is extremely low for wind generation.

In the countries examined, wind replaces hard coal during hours of low demand, and gas-fired power plants during high demand periods, Poyry noted. There were even instances of zero spot electricity prices in some of the studies examined, and this was partially attributed to wind generation. The price effect was much greater when wind power was available during peak power periods.

The Poyry review also examined two studies looking at the costs and benefits for end users of renewable energy support schemes such as feed-in tariffs. These studies indicated that support schemes can make economic sense. If both the direct and indirect costs savings from wind generation are accounted for, the net effect of the support scheme would be that consumers pay lower prices, according to Poyry. Apart from savings in fuel costs, additional savings also come from reduced compliance costs for utilities with the European Emissions Trading Scheme mechanism. Since wind emits no carbon dioxide, utilities simply have fewer carbon credits to purchase.

The complete literature review is available on EWEA's website, ewea.org. Poyry says the studies examined historic data and focused on single countries.

In light of the 2020 renewables targets the 27 member states of the EU must reach, Poyry said it would be useful to also study forecasts on the effects of a greater penetration of renewable energy on electricity prices, with data from all wind-producing member states. Poyry, which is led by president and CEO Heikki Meilinen, is preparing such an analysis for EWEA this year.

WHERE THE TAPE IS REDDEST

Lead-time study turns up surprise findings, writes Janice Massy.

Patience is a necessary virtue for many wind developers in Europe, judging by a study of obstacles to wind development in the region. The EU-funded Wind Barriers project finds it is quicker to get consent for an offshore wind project, with an average lead time of 18 months, compared to 42 months for onshore. The time needed for wind farm construction permission applications ranges across the EU from less than ten months to nearly 60.

The project was co-ordinated by the European Wind Energy Association (EWEA). It collected data from 22 countries representing 5.7GW of capacity, most of it connected in 2008. The initial results were revealed at the European Wind Energy Conference in Warsaw, Poland, in April.

No single reason accounts for the wide differences between countries, but acceptance by communities plays an important part. Some 30% of all projects stuck in the consenting process are delayed by public resistance and law suits. The lack of clear guidelines from local authorities for wind developers is also a frequent problem.

Another factor is the many authorities with whom developers must liaise. At five, Denmark has the fewest bodies requiring consultation; Greece tops the list with 41. Yet fewer bodies to consult does not automatically mean faster consent. Spain only has nine parties to consult, but is the second slowest country - after Portugal - taking an average of more than 57 months to secure construction permission.

The study found Italy and the UK to be among the best for gaining consent, which came as a surprise to the countries' wind communities. Developers say it typically takes years to drive a wind project through the Italian permitting process. Economist Sune Strom from the Danish Wind Industry Association, a key contributor to the study, says he, too, was surprised by the findings for Italy and the UK. But he points out that the conclusions had to rely on data from completed wind farms. "We can only calculate the lead times for the projects that have all their consents in hand; therefore these are the successful ones," he says. In the UK, those that gained consent during the period under investigation tended to be smaller wind farms. Many larger, more complex projects are still languishing in the system.

For onshore projects still awaiting consent, the two main stumbling blocks cited are lack of grid capacity and environmental and political issues, each of which is blamed for holding up 60% of projects.

"If Europe is serious about reaching 20% renewables by 2020, some member states need to streamline their consent procedures for wind farms," says Justin Wilkes, EWEA policy director. "There are a number of actions all member states could take: creating a one-stop-shop approach for contacting the different authorities, writing clear guidelines for developers, and introducing better and streamlined spatial planning procedures," he says.

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